The new minimum marks the second of at least four annual increases in the low-income wage base. Arizona's minimum wage, which stood at $8.05 an hour as recently as 2016, rose to $10.50 on Jan. 1.

More raises are ahead

It will rise further to $11 an hour in 2019 and to $12 an hour in 2020, after which it will increase annually with inflation — specifically, with a measure of the federal Consumer Price Index.

The changes were part of Proposition 206, approved by Arizona voters in November 2016. That measure also mandated that nearly all businesses operating in the state, whether headquartered here or not, provide at least some paid sick leave for both part-time and full-time staff. The sick-pay measure took effect last July.Both provisions are enforced by the Industrial Commission of Arizona.

What about waiters?

Employers in Arizona may still pay waiters and other tip-receiving workers up to $3 an hour less than the minimum wage, provided those employees earn at least the minimum wage when tips are included.

The new higher minimum wage doesn't apply to federal or state workers, to people who work on tribal lands and in a few other situations, such as people employed by a parent or sibling or those performing babysitting services on a casual basis.

Flagstaff ushered in the new year with a minimum-wage increase of 50 cents an hour to $11. Other cities around the nation also are boosting wages, including Seattle (up 45 cents an hour to $15.45 for some employees) and several Silicon Valley cities in California such as San Jose (up $1.50 an hour to $13.50) and Sunnyvale (up $2 to $15).

Federal minimum wage lags

Arizona is one of 18 states that hiked the minimum wage on New Year's Day, with the increases ranging up to $1 an hour (in Maine), according to the Economic Policy Institute, which favors wage hikes. The federal minimum wage of $7.25 an hour has not increased since 2009, the research group noted.

Critics have bemoaned higher minimum wages as a precursor to layoffs.

“Rather than celebrating New Year’s minimum-wage increases, policymakers should recognize their inevitable hangover of fewer job opportunities for those who need them most,” said Michael Saltsman, managing director at the Employment Policies Institute, a group that's critical of increases.

Businesses warn of layoffs

Garrick Taylor, a spokesman for the Arizona Chamber of Commerce & Industry, predicted that some businesses will respond by eliminating jobs.

"Employers are more likely to accelerate automation, which makes workers unnecessary," Taylor said. "The growth of self-checkout lines, self-serve soda machines and automated parking garages isn’t just a sign of advancing technology; it’s also a response to growing labor costs."

So far, though, employment data for Arizona indicate the higher minimum wage that took effect a year ago didn't contribute to job losses.

Arizona's unemployment rate of 4.3 percent in November 2017, the most recent figure, was down from 5 percent in November 2016, when voters approved the increase. The state added 44,000 net jobs over those 12 months, including 12,000 in restaurants and bars, according to the Arizona Office of Economic Opportunity.

The national unemployment rate dropped to 4.1 percent from 4.6 percent over the same period.

"Raising the minimum wage (at the start of 2017) didn't affect food-service jobs," said Lee McPheters, a research professor in economics at Arizona State University's W.P. Carey School of Business.

Many Arizonans will get raises

In fact, he said Arizonathis year ranks first nationally in the rate of job gains in the restaurant business, a sector largely populated by low-wage workers.

Yet he pointed out that employment growth has been much lower in retail, another sector of modest pay, though that could be the result of more online sales or other factors.

At any rate, minimum-wage hikes benefit a lot of people. Roughly 338,000 Arizonans were earning under $10 an hour a year ago and thus enjoyed a pay raise, McPheters said. He estimates another 180,000 or so were making slightly above $10 and might have received a bit more money too, as they saw less experienced or productive colleagues getting a raise at the start of 2017.